The cross-price elasticity of demand of products "M" and "N" is zero. This implies that "M" and "N" are
A) substitute products.
B) complementary products.
C) independent products.
D) unique goods, as the price elasticity of demand for one of them is zero.
C
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To explore the rationale for specialization, economists use the
A) real-nominal principle. B) principle of opportunity cost. C) marginal principle. D) principle of marginal exchange.
In the liquidity trap, monetary policy
A) has a large impact on interest rates. B) has a small impact on interest rates. C) has no impact on interest rates. D) has a proportionate impact on interest rates.
Supply-side economics stress that: a. aggregate demand is the major determinant of real output and aggregate employment
b. tax rates are not a major determinant of real output and aggregate employment. c. an increase in government expenditures financed by higher tax rates will cause RGDP to rise. d. marginal tax rate changes can exert a significant impact on RGDP, even in the long run.
Which of the following is true regarding value and exchange?
a. Middlemen fail to create value since they do not expand the supply of physical goods. b. A good or service has a given value regardless of who uses it or how it is used. c. If it were not for middlemen, transaction costs would be zero. d. Voluntary exchange creates value by channeling goods into the hands of people who value them most.